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If you want to beat the market, the first step is to stay ahead of the market. Where are the disruptors today? They're everywhere, if you know where to look. Here are four I'm eyeing:
Baidu is China's leading search engine. No one has come even close to challenging the company's market dominance in the world's most populous nation. Internet usage continues to climb. The improving economy finds advertisers willing to spend more to reach quality leads. You have to like Baidu's prospects in that scenario.IMAX (Nasdaq: IMAX) is expanding its empire of proprietary mammoth-sized screens. It's the perfect network effect, as exhibitors worldwide are ramping up their orders for digital systems, just as more movie studios are releasing enhanced IMAX versions of their movies. With the latest installments of Transformers, Harry Potter, and Night at the Museum in its summer pocket, IMAX is definitely popcorn-worthy. As home theaters improve, moviegoers are seeking out the IMAX experience that they can't re-create in their living rooms.E*TRADE (Nasdaq: ETFC) has been neglected in this market rally. Investors prefer its profitable peers, but the discount broker has made inroads in repairing its troubled balance sheet. The E*TRADE Baby is also one of the best discount broker campaigns in years.Home Inns & Hotels (Nasdaq: HMIN) is a fast-growing chain of value-priced lodging in China. The stock has nearly doubled over the past four months, but what will a nation of 1.3 billion people do as discretionary income grows? Travel is going to be a major growth industry, and Home Inns is ramping up its capacity.How did I come across these disruptors? Well, I'm one of the analysts on the Motley Fool Rule Breakers newsletter team. Two of these stocks -- Baidu and IMAX -- are active recommendations. Subscribers can also unearth superior growth stock ideas on the lively discussion boards, where members pick apart potential winners.
These are companies that I can see mattering a lot more in the future. They specialize in niche industries that can take down -- or revolutionize -- larger sectors. They pass my three-year test.
Sorry, Warner Music Group. You flunked with fading colors.
Join me and my fellow subscribers in sniffing out the next wave of market-thumping disruptors: I invite you to check out Motley Fool Rule Breakers free for the next 30 days. That's less than three years, but it's a great start!
This article was first published March 3, 2009. It has been updated.
Longtime Fool contributor Rick Munarriz is a fan of disruptive growth stocks and has been part of the Rule Breakers analyst team since its inception nearly five years ago. He does not own shares in any of the stocks in this story. Baidu and IMAX are Motley Fool Rule Breakers selections. Apple is a Motley Fool Stock Advisor pick. The Fool has a disclosure policy.
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